All Forum Posts by: Justin Hoggatt

Hey @Earl Nurse.  I'll be honest, I use all my own tools versus the BP calculators.  When I look at this report, I don't see where you'd be understanding your cash out of this.  Perhaps it's wanting to have you calculate that out yourself because one big question is how much the loan amount is for and how much you still owe on it.  

Some questions to think about though as I look at this and just curious if you've though about it. 1) Is the loan interest rate accurate for you on this being a rental property? It may be higher. 2) I think your loan fees are too low, unless the loan interest rate is higher and you're getting some lender credits. 3) Is the refinance loan amount $145,500 after equity is maintained? The equity that will presumably have to remain will be 20%, so if the ARV is $145,000, then the refinance will be for $116,000.

Other notes I have in mind but up to you. Your repairs budget is possibly low, but could be somewhat accurate depending on the rehab.  The 1% annual increase on expenses is low, I'd mark that at a greater increase. Don't forget your carrying costs in the estimated rehab time (if not already part of your $20k estimate).   

With your initial loan being $88k, $22k down and $20k repairs, you'll be pulling out $145,000-$116,000 = $29k in refinance.  So, you'll recapture some, but not all, leaving about $13k of your cash in the deal.  

I hope that helps.

Yes, I would say that's an expense.  It comes out of the cash flow of the property to pay for the management.  The benefit of investor 1 is that he gets that 10% for management before any profits/distributions are paid out.  If investor 1 is willing to do the management, then think of it as a bit of a savings as well because otherwise he's paying for the management out of the income and he wouldn't ever see that.  I don't have AirBNB but I'm pretty sure management fees are higher than 10%

I've seemingly found myself explaining this a lot lately to others.  There does seem to be a general progression in real estate, and you'll see proof of this preference with lenders and investors alike.  The first step is to typically get a first single family home, then a couple others maybe, then a small multifamily (duplex - quad), then into the 5+.  Of course, there are ways to jump into higher multi-family type situations but these usually require a partner that is already in this space.  I would suggest this type of progression because the single family space allows you to understand renters, get going slowly, and if it doesn't work out, the value of your home is still a market value.  A multi-family building, if you mess that up, will loose a lot more value.

Good luck on your journey!

Hey @Thomas Messano,  By new investor, do you have any properties yet?  There are a lot of options available and I think it depends on what it is you're looking to accomplish.  It sounds like your post is looking to understand values from software.  This could be the value of a purchase, the value of a rent, etc.  What is it that you're trying to accomplish?

For renters, I think having a good software solution for a tenant portal, maintenance, payment options, online applications, etc. is a must have.  If you're really new, I had previously enjoyed using Tenant Cloud.  If you're more experienced and have enough units, I use and really enjoy Appfolio PM.  These help in organization, maintenance requests, and allow accounting as well.

Like someone else mentioned, it's part of the long game.  I think it's fun and it's certainly a bit to get started.  You'll need to think about your gear you're going to use (audio is a big component of it), the softwares (recording, editing, posting), the topics you'll discuss and who you'll interview.  I think getting started is a hard mix of having valuable guests, talking about meaningful content, and getting guests.  Aside from that, I think it's all about just getting going and doing it.  Don't worry about your voice.  You'll sound better and eliminate the "umms" as you do more and get used to it.

If you have the money for another home already for a down payment on the next house, it definitely sounds like you should keep it and rent it.  

Hey, Garrett.  I'm confused by the issue with the lender and any red flags you're talking about.  Is there something you're particularly worried about on that?

I'd do it right and have a real estate attorney complete it or see if NC has standard forms you can use like they have in CO.  You can download these standard contracts from the Dept of Reg Authority.

I can relate to this story, as probably many seasoned property managers can.  Document, document, document.  It seems like the posting you put here is pretty good already, just put some dates and times on all this.  It sounds to me like you're going to have a fun time with this one, and yes, make sure you get rid of them as fast as you can.  My lawyer had recommended for me on any problem tenants to make sure that I mention "it's a business decision" and leave it at that.  Do not start in with reasons with the tenant.  Of course, you could always offer cash for keys if you'd like to be the nice guy.  Keep the notice to the 50 days, all you should need is 30 days prior to the end of the lease.  I wouldn't give them any other reason's to not pay their rent.  Also, I would current check to see if they are violating their lease in any way and start sending letters of lease breaks and rules violations.  This would be all in your attempt to document and have a solid defense if you go to court with this one.  If you receive complaints from your other tenants, get that in writing from them as well.

The introduction letter, and often times the sellers departure letter, go out to all tenants after the deal closes (on that same day).  Try and have all the contact information for each tenant before hand so that you can do that.  It's certainly a surprise to tenants to receive a letter of transfer.  A word of advice on the matter - try to close at the beginning of the month versus the end of the month.  I know you have a closing date already, but if it's towards the end of the month, sometimes payments get crossed up and sent to the wrong company.  Make sure that letter really emphasizes how to pay.  

@Dawn Rivera, good luck in your pursuit.  I can appreciate the training your taking and getting some much needed knowledge along the way.  I think the next step for you is to look at some favorite books out there on RE investing - you'll learn A TON for much less than a course will give you.  A course is often times a means of you reserving your time to the dedication of learning.  If you reserve your own time on books, BP, etc. you'll do just fine.  I also think that you should find a local real estate investors club and start networking.  Find out what works for others in your area.  Team up with someone, and start getting your contacts and buyers going.  Once you have a deal, that's only the first step, because then you either buy it, let it go, or preferably make sure you have a buyer that will want it.